***Advertisement: Ascent Partners 1 June 2010***
Much has been written about the demise of many printing companies over the past 12 months. As proprietors now begin to forecast how they may end FY 2010, and consider how they will operate, or get through FY 2011, many should reach the conclusion that it is time to move on, or dramatically change the way they operate. Richard Rasmussen shares his advice.
In The Financial Review, 25th May 2010, an article entitled, ‘Stubbornness costs billions’ outlined that “more than $2 billion is being sucked out of the Australian economy because businesses refuse to accept they are in trouble.”
Now whilst this is not specifically referring to our industry, it is just as relevant. The article’s premise is that proprietors are stubborn. It is their pride and a failure to understand their predicament that meant that many just ploughed on, which usually exacerbates their problems. And whilst trading on they continue to lose money, the creditors and staff collectively get collectively less ($2 billion less!)
Here are some key points:
• Proprietors “get to the stage when the businesses can’t really be saved. Then the consequences for creditors and staff can be far worse”
• Currently creditors get an average of only 0.5% of what they’re owed by collapsed companies
• 39% of registered Australian companies are estimated to be hurt by failed companies every year
• The owners may have thought they had been through tough times before and survived, so they just do what they did in the past, hoping it will work
• If proprietors have tried everything they can think of to make the business successful again, and have failed, then it is probably time to get outside help
• The sooner the problems are confronted, the better. Turnaround plans can be developed
• Not all businesses can be saved
For the printing industry, this coming financial year, more than any I can think of in the past, needs to be objectively planned. The issues outlined above, I am sure will resonate with many printers, large or small. Their hope for those “green shoots” in 2010 never eventuated
It’s time for many to put up their hand and say: “Houston, we have a problem.” And then work on ways to correct the issues with others. It needs to start with an objective business appraisal, and then a realistic look at the options, and the development of a realistic plan. And the chances are they can’t be developed without outside help.
Ascent Partners can help printers large and small, often working in conjunction with the business’s accountants. We know what businesses actually sell for, can realistically appraise your business and assist in the development of an objective plan. Call Richard Rasmussen on 0402 021 101 for an initial confidential discussion, or visit our web site for more information, www.ascentpartners.com.au
